On Nov 30, Zacks Investment Research upgraded
Western Gas Partners LP
) to a Zacks Rank #1 (Strong Buy).
Why the Upgrade?
This oil & gas pipeline operator has delivered a 32.50%
earnings beat in the most recent quarter. The long-term sales
growth of the partnership is pegged at 25.0%.
Western Gas Partners has begun to realize the benefits of organic
investments made in early 2012. After matching the earnings
expectation for the second quarter, the partnership handsomely
surpassed the consensus for the third quarter. The Street reacted
positively to the earnings beat with the Zacks Consensus Estimate
for 2013 increasing 9.9% in the last 30 days to $1.67 per share.
This reflects projected year-over-year growth of 3.01%.
The strong performance has allowed the partnership to increase
its quarterly cash distribution to 58 cents per unit, a 16%
increase from the prior-year distribution of 50 cents.
The partnership offered $250 million, 2.6% senior notes in the
third quarter, which received investment grade rating from the
top three rating agencies. The proceeds were used to repay its
dues under the revolving credit facility.
The partnership has consistently invested in capital projects
like Lancaster Trains I and II to boost its future prospects. The
Lancaster Trains projects are expected to come online at the end
of 2014, beginning 2015.
In Jun 2013, the partnership decided to acquire a 25% at-cost
interest in a joint venture with
Enterprise Products Partners L.P.
). The joint venture will own two fractionation trains in Mont
Belvieu, Texas. This strategic investment will also boost the
top-line of the partnership.
Other Stocks to Consider
Besides Western Gas Partners, other players in the sector, which
look attractive at current levels, include
Crosstex Energy Inc.
EQT Midstream Partners
). Both these stocks carry a Zacks Rank #2 (Buy).
ENTERPRISE PROD (EPD): Free Stock Analysis
EQT MIDSTRM PTR (EQM): Free Stock Analysis
WESTERN GAS PTR (WES): Free Stock Analysis
CROSSTEX ENERGY (XTXI): Free Stock Analysis
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